Start with the customer and work backwards—harder than it sounds but a clear path to innovating and delighting customers—a useful working backwards tool: writing the press release and FAQ before you build the product.
Most of Amazon’s major products and initiatives since 2004 have one thing in common—they were created through a process called Working Backwards. It is so central to the company’s success that we used it as the title for our book. Working Backwards is a systematic way to vet ideas and create new products. Its key tenet is to start by defining the customer experience, then iteratively work backwards from that point until the team achieves clarity of thought around what to build. Its principal tool is a second form of written narrative called the PR/FAQ, short for Press Release and Frequently Asked Questions.
At Amazon, focusing on the customer is so central to the management mindset that it is the company’s first Leadership Principle:
Customer Obsession. Leaders start with the customer and work backwards. They work vigorously to earnand keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
The Working Backwards PR/FAQ process was created so that every leader at Amazon could stay focused on customers’ needs while building and inventing new products. Start with the customer and work backwards…easy, right? In practice, it is much harder than it sounds. We encountered this firsthand in 2005 as we sought to create new digital media and web services businesses. The tools we initially applied to identify new business opportunities included S.W.O.T. analysis, gathering research on the expected market size and growth rate of each new business sector, drafting a pro forma P&L, etc. We applied all of these and more, but after a few meetings, we realized that none of these tools required us to think deeply enough about the needs of customers and how we could create something new and valuable for them.
We then tried other tools like mock-ups and lengthy documents describing each new product idea. Through a process of trial and error (and Jeff’s insight), we eventually landed on the idea of writing a press release and a series of frequently asked questions (FAQs) to describe each new product. Normally, writing a press release is the last step in launching a new product. When writing the press release, you are laser-focused on describing your product so that when a potential customer reads about it in the press, they will be excited and compelled to buy it. You aren’t focused on your competitors, current capabilities, P&L, business partners, or other considerations. Writing a press release is a forcing function to ensure that the creator of the new product idea is focused on the customer. Once you have written a compelling press release, you and your team can work backwards from there, using the FAQ process, to figure out how to bring your new product vision to market.
Heading: Name the product so the reader (i.e., your target customers) will understand—one sentence under the title.
Subheading: Describe the customer for the product and what benefits they will gain from using it—one sentence underneath the Heading. Describing the customers precisely here is critical. If you think your product is for everyone, you are mistaken. Great products are tailored to the specific needs of a specific customer segment. For instance, If you are designing a new car, you need to decide whether your customer is a) urban, single professionals under 35 who live in apartments or b) suburban families, 35+ with dual incomes, 3 kids, a dog, and the need to carpool to soccer games. Carefully defining the customer segment you are serving is critical.
Summary Paragraph: Start with the city, media outlet, and your proposed launch date. Give a summary of the product and its benefits. The launch date should have meaning. That is, pick a date when you expect actually to launch this product. At first, this will be a rough estimate, but by the final draft, this will be the planned launch date.
Problem Paragraph: This is where you describe the problem(s) that your product is designed to solve. Make sure you write this paragraph from the customer’s point of view. This sounds simple, but in practice, this requires a deep understanding of customer needs. Even if you understand their needs, there may be more than one problem that you could solve. Consider which problem(s) is most important to the customer. Not all problems are created equal. You must identify a problem with a large total addressable market (TAM). The market size is the number of customers who have this problem multiplied by how much each is willing to pay to solve it. The problem is not worth solving if there is either a small population of potential customers or customers aren’t willing to pay the price to solve it.
Solution Paragraph(s): Describe your product in detail and how it simply and easily solves the customer’s problem. For more complex products, you may need more than one paragraph. This may seem obvious, but the solution needs to address the problem directly. For example, suppose the customer’s problem is that they need organic fruits, vegetables, and healthy snacks delivered to their home between 6 a.m. and 8 a.m. twice weekly. In that case, the solution must be squarely focused on these needs, not other potential needs, like providing personalized recommendations for which fruit to buy. The best products simply and directly address the primary customer need rather than provide a laundry list of features that may sound worthwhile.
Second, the solution must be described in sufficient detail to clarify how it addresses the problem. Long, vague, or high-level descriptions are ineffective. An excellent product solution is described with both clarity and brevity.
Third, the solution must acknowledge the competition and state how this new product is meaningfully differentiated from the other products or methods the target customer uses to solve the problem today. Your paragraph should include: “Today, customers with this problem use x, y, or z products to meet their needs. Those products fall short of solving x problem(s). Our product addresses these unmet needs in the following ways.”
The solution(s) you describe here relative to competition is how your product is differentiated and creates value. If your proposed product solution solves the same problems in roughly the same ways as existing products, then you need to go back to the drawing board.
Quotes & Getting Started:
Add one quote from you or your company’s spokesperson and a second from a hypothetical customer describing the benefit of using your new product. Describe how easy it is to get started, and provide a link to your website where customers can get more information and get started.
A well-written PR defines a specific objective– a destination where there is a treasure. Think of the FAQ section as the map to that destination and a detailed description of the dragons you will need to slay along your journey. The questions you ask and the answers you provide explain what problems you need to solve and how your team proposes to solve them.
A wide variety of issues and topics are covered in a good FAQ (see examples in Appendix A). The first section is devoted to External FAQs. This is where you provide detailed answers to the questions that you can expect the press and customers to ask, such as: How does it work? What is the warranty? What is the return policy? How do I install it? These are relatively straightforward questions, but the details you provide in your answer matter a lot. As with the Press Release, the External FAQ is a dialogue with your customer addressing their most important issues using language they can understand (that is, no corporate jargon).
The next section is the internal FAQs. A well-written internal FAQ section anticipates the most important questions that senior leaders and stakeholders in the company will ask after reading the PR. Anticipate questions from every department in the company: finance, marketing, customer support, operations, HR, etc. Additionally, the internal FAQ should cover all the challenging problems that need to be solved to build the product, whether technical, financial, legal, or operational.
An excellent FAQ demonstrates mastery of every aspect of the product. It should be optimistic but also realistic. It should demonstrate that the authors aren’t looking through rose-colored glasses and are in love with their ideas. Instead, it should include a data-based assessment of the potential market for the product, a firm grasp of what will be required to build it, the risks involved, and the conditions under which the product will succeed or fail. It should demonstrate that multiple options were considered for the customer’s problem and a range of product ideas to solve it.
One of the great things about the PR/FAQ process is that anyone can use it. Whether you are a college student, an entry-level employee at a big company, or a C-level executive, you don’t need specialized design or coding skills, you just need to be able to write. The process is designed to be lightweight, enabling teams to develop many new product ideas. The first draft of a PR/FAQ should take only a few hours, not a few days. As a result, it is easy for individuals and teams to write many PR/FAQs to consider various possibilities.
A great product development process should be a funnel, not a tunnel. A funnel accepts and considers many new product ideas at the onset, progressively eliminating lower-potential ideas and focusing on a short list of products with the most significant potential. By contrast, a tunnel is constrained at the outset, and all or nearly all new product ideas that enter the process are built and launched. A tunnel is when a team is focused on building and launching each product idea they identify, skipping the initial evaluation phase to distill and select only the highest-impact ideas.
The best PR/FAQs are produced through an iterative process requiring discussion, debate, and collaboration with many stakeholders. This takes several forms. Early on, the document is a solo effort, and the author is typically a product manager. In early drafts, the PR/FAQ typically has many holes and questions that haven’t been answered yet, requiring the author(s) to research to fill in the blanks. The fidelity and detail increase with each draft. Once more blanks are filled in, the author seeks feedback from their manager and a few relevant (ideally cross-functional) peers. Eventually, the early draft is ready for a first review with a cross-functional team of stakeholders and a leader or decision-maker. A small group of about 10 contributors makes sense for the first few drafts. Once the decision maker in the small group is satisfied with the document, they set a meeting to share it with the company’s appropriate executive(s). This leads to one or more reviews at the executive level. If the executive team finds the idea promising, multiple subsequent drafts and review meetings will follow.
You may need more than one PR/FAQ document for complicated projects. For example, Fulfillment By Amazon was developed using two PR/FAQs, one from a seller perspective and one from a buying perspective.
A common misconception is that the goal of any PR/FAQ meeting is to “sell” the idea to the reviewers and for the decision maker to give it a thumbs up or thumbs down. This was not the case at Amazon, where we were focused more on truth-seeking vs. selling and improving vs. deciding. A well-run PR/FAQ meeting is an opportunity for each reviewer to both a) get a deeper understanding of the proposed idea and b) ask questions and give feedback. The participants help the authoring team evaluate and refine the product through debate and discussion.
The document is circulated at the start of the meeting, followed by 15-20 minutes of silent reading and note-taking. The document is typically online, and participants simply add their comments and questions to the Word or Google Doc. After everyone has read the document, the remaining 40 minutes are open for questions, debate, and discussion. This can be done on a “go around the room” or page-by-page basis. The authoring team addresses comments and questions from the document and takes detailed notes of the conversation.
The reviewer’s job is to evaluate objectively:
1. Is the customer clearly defined?
2. Is the problem clearly defined?
3. Does the proposed solution address the problem?
4. Would we expect customers to change their behavior to buy/use the solution?
5. Which dimension(s) is the new product better, cheaper, or faster than substitutes?
6. Is the TAM and the payback big enough?
7. What are the constraints or problems (e.g., business, resources, technical, legal) we will need
The reviewer feedback (especially from the executive decision maker) informs the changes to how the product is described in the PR and FAQs. The authoring team takes this feedback to guide additional work, research, and improvements to the PR/FAQ before the next review.
At some point, a level of completion of the PR/FAQ document is reached, and a go, no-go decision can be made. If the new idea is a go, what happens next should be well understood because it is described in the FAQs. In other words, resources (people, money, fixed cost investments), a rough timeline, and other operational matters are spelled out in the document. An executive leader will need to stay in touch with the new team and leader with monthly or weekly reviews depending on the timing and nature of the new product.
If the PR/FAQ is not approved, there are a range of reasons why this can happen and the potential next steps, including:
1. The solution is a “copycat” or not sufficiently differentiated from current products. Go back to the drawing board and come up with new ideas.
2. The TAM is too small. Return to the drawing board and determine if changes can be made in the target customer set, the problem, or the solution to grow the TAM.
3. The upfront investment is high, and the payoff is risky and/or low. Find ways to get started with fewer resources.
4. The product is not viable (today) because of one or more unsolved problems described in the FAQ. In this case, the PR/FAQ may be revisited in future quarters or years if/when there is a solution.
5. You would like to move forward with the idea, but because you already have a lengthy backlog of other ideas, you will need to prioritize it to determine where it belongs in your backlog. Is it ahead of one or more items already on the list, or should it be scheduled for several months or quarters in the future?
Understanding the mechanics of writing a PR/FAQ is essential to making this process work for you. Let’s imagine you are the head of a division for a car company, and you are trying to come up with your next new model.
In one press release, you describe the Phoenix 400– a new mid-size SUV. As described in the PR, the Phoenix 400 is gasoline-powered and has the capacity of a midsize SUV, a Jeep-like design, a cloth interior, and a price of $65,000. Essentially, no elements of this product are relatively better/faster/cheaper than the already crowded mid-sized SUVs available to customers today.
You may have written the release describing such a ho-hum car because it is based on your car company’s current technology, engineering manufacturing, and cost management capabilities today. You started with what your company can do and worked backward from there. This press release should be discarded before even writing an FAQ.
In the next draft, you write a new press release for a new zero-emission electric car called the Excel 850. As described in the PR, the Excel 850 has a range of 850 miles, a recharge time of 15 minutes, the capacity of a large SUV, the handling of a sports car, an elegant design, a luxurious interior, and a price of $19,000. Who wouldn’t want to own this car?! This is an example of a PR that starts with customer needs and describes a new product that is meaningfully better/faster/cheaper than the alternatives.
Of course, the challenge in the case of the Excel 850 is that you have described a product that exceeds the technology, engineering, and cost of manufacturing abilities of not only your own company but every other car maker on the planet—making this product a reality will require you and your team to solve multiple technical, engineering, and manufacturing problems.
In one respect, this is what you want. A great PR defines a valuable destination. You and your team create value through the problems you solve on behalf of customers to arrive at this destination before your competitors do. If your PR doesn’t require you and your team to solve at least one complex problem with a new and innovative approach, you should return to the drawing board and keep iterating on the PR until it does. The challenge is to identify innovative solutions that make the idea possible in a near-term timeframe.
Speed vs Velocity
Identifying and articulating a high-value customer problem and product solution requires considerable management bandwidth paired with a scalable, repeatable process. The same applies to developing detailed solutions to various challenges and problems in the FAQs. If it were easy, companies would always be creating innovative new products. The PR/FAQ process is most effective when multiple drafts have been reviewed and discussed with a cross-functional team and senior management throughout many meetings.
This process required months of work for the most successful products at Amazon before we finalized the PR/FAQ, approved hiring the team, and began production. Outside of Amazon, most people have a profoundly negative reaction to spending weeks and months writing PR/FAQs before they start building a product. This will slow down, not speed up innovation, right?
People tend to confuse speed with velocity. Speed measures ft or meters per second, but there is no direction. Velocity, on the other hand, is a vector. Velocity is speed with a direction. In other words, you want speed if you want to go fast but don’t care about the direction or destination. On the other hand, to reach a specific destination, you want velocity.
Amazon Web Services is proof of the effectiveness of this approach. Jeff Bezos and Andy Jassy identified web services as an essential new technology in 2004. However, they didn’t launch the foundational services of AWS (S3 and EC2) until 2006. Jeff, Andy, and the early members of the team spent more than a year writing, revising, debating, and discussing PR/FAQs to determine what problem(s) AWS was trying to solve, who their customers were, and what the right product solutions were.
Once they finalized the initial AWS PR/FAQs, the most critical decisions were made, and the details of the products to build were captured in the documents. This meant that anyone at Amazon could read these documents and come away with the same understanding of the product plan. By investing so much time upfront in planning, they were able to move fast in the production phase. In Amazon’s 2015 letter to shareholders, Jeff Bezos wrote, “…AWS is bigger than Amazon.com was at 10 years old, growing at a faster rate.”
It takes conviction and discipline to say, “We are not ready yet to start building. We need more clarity on these next few issues first.” But over time, we realized that this approach got us to our end goal of delivering value for customers at scale much faster than we otherwise would have.
Selling vs. Truth Seeking
Great decisions are made by understanding an issue and the many alternatives to solve that issue. When you try to “sell” an idea to “win” approval and budget, you impede this process. The way to get around this is by understanding and articulating in the document what will prevent the product from being a success by asking and answering questions like:
Discount Competition & Current Solutions
It is a mistake to discount or not correctly factor in the competition. If the customer problem is big, they already have some product or method of dealing with it today. Make sure to be clear about this in the FAQ by addressing these questions:
Customer Backwards, Not Skills Forward
With the PR/FAQ process, you start by envisioning an innovative product for customers and work backward from there to identify the capabilities you will need to add/acquire and the problems you will need to solve. Most companies view new business ideas and opportunities using a skills-forward approach where they rely on their current business model, skills, and capabilities. The PR/FAQ process is designed to decouple the concept of what new products customers want from what we are good at building today.
We give an example in our book about how Amazon approached the problem of successfully transitioning from selling hardcover books, CDs, and DVDs to digital media. The first new product we built was the Amazon Kindle, a connected device combined with a digital media service, two domains where Amazon had no prior capabilities or expertise. Later, in digital video, we would also add the capability of our own TV and movie studio.
Before we built these new capabilities, many leaders inside Amazon thought that doing so would be risky and expensive. In retrospect, it would have been much riskier to have not built device hardware and digital media service capabilities and to have seen the opportunity to miss out on being a leader in a new, large, and growing business segment (digital media).
Great product, Wrong Problem
Building a great product that doesn’t solve a problem that matters to customers won’t result in a healthy new business. One could argue that the Amazon Fire Phone is an example of this. With four forward-facing cameras, the innovative technology in this phone produced 3D effects when navigating and using apps. Unfortunately, this technology, when applied to mobile apps didn’t solve any important problems for customers. The Fire Phone flopped.
This is why getting the problem right is so significant. It can’t be a problem already solved with a similar product unless your new product creates additional value by being meaningfully better, faster, or cheaper.
Works with Agile
The PR/FAQ process is used appropriately at the beginning of the new product development process. Once the PR/FAQ is finalized and approved, the Agile process can be employed to build the product. Amazon frequently used Agile in conjunction with the PR/FAQ process.
Q: What is the price?
Q: How does it work?
Q: How do I get help/customer support
Q: Where can I buy it?
Q: What products or solutions does the target customer use today to solve this problem?
Q: What problem(s) does this product solve for customers?
Q: How does this proposed product solution create value for customers? That is, in what way(s) is this product
better, cheaper, and faster than the alternatives?
Q: What/who are the current competitors for this product?
Q: How large is the estimated consumer demand, and what is the TAM (total addressable market?
Q: How many consumers have this need or problem?
Q: For how many consumers is this problem big enough that they are willing to spend money to do something
about it? If so, how much money would they be willing to spend?
Q: How many of these consumers have the characteristics/capabilities/constraints necessary to use the product?
Q: What happens if a customer encounters x? How does the product deal with use case x?
Q: What are the challenging problems (business model, engineering, legal, UI, etc) that will need to be solved to enable this new product?
Q: What new capabilities will we need to establish to support this product?
Q: Do we have any third-party business relationships or dependencies to build this product? If so, what are they, and why will they be willing to partner with us (what is in it for them)?
Q: What third-party technologies are we dependent on to function properly for this product to work as promised?
Q: Are there any potential regulatory or legal issues to consider?
Q: What are the per-unit economics of the product? What is our expected Gross Profit and Contribution profit per unit?
Q: How much will we need to invest upfront to build this product regarding people, technology, inventory, warehouse space, etc.?
Q: How will we manage the risk of the upfront investment required?
Q: Based on the up-front investment and the per unit economics, how many months/years before we achieve profitability?
Q: What assumptions need to be true for this product to be successful
Q: What are the top three reasons this product will not succeed?
As needed, the Bar Raiser Core members (they meet monthly or quarterly) make policy decisions regarding the company’s interview process. The Bar Raiser Core should be composed of leaders from multiple functions and levels in the company. HR leaders can and should be included in this group (if they are among the most talented Bar Raisers).
Get in touch for bulk orders, speaking events or advisory services.
© 2021 Working Backwards LLC. All rights reserved.
See our Privacy Policy and Terms of use